70% small, mid-sized firms not prepared for rollout of GST

NEW DELHI: More than 70% of the country’s small and mid-sized firms are yet to begin preparations to get synced with the goods and services tax (GST) structure, even as the country prepares to roll out the biggest indirect tax reform from July 1.

Consulting major KPMG and the Federation of Small Medium Enterprises (FISME) said while the large companies are ready to move to the new tax structure, the small ones, and especially those in the informal sector, are battling against time to move towards the regime.

Sources said several of these companies were postponing the rigorous exercise required to move towards adopting the new system.

“About 70% of the MSMEs are not yet prepared for implementing GST. The FISME, along with Small Industries Development Bank of India (SIDBI), has organised a helpline, which will be operational soon... The idea is to handhold the small companies and most general queries will be answered immediately. Specific problems that are brought up will be resolved in 48 hours,” Anil Bhardwaj, general secretary of FISME, said.

However, Waman Parkhi, partner, indirect tax, KPMG, said there could be hiccups in the initial stage as time is running out. “Till the final tax structure is decided, companies cannot fix the new prices for their goods. The entire exercise needs to be done hurriedly as it will have to be implemented from July 1,” Parkhi said.

Finance minister Arun Jaitley earlier said there could be teething problems once GST is implemented but “in a great experiment of this kind, that is always likely to be there”.